The agency cut both long- and short-term foreign currency ratings, to BBB-/A-3 from BBB/A-2, a decision that pushed Russia's already battered assets further down.

"The downgrade reflects the risk we perceive of a continuation of the large financial outflows observed in the first quarter of 2014, during which the size of Russia's financial account deficit was almost twice that of the current account surplus," S&P said.

Russian central bank data released earlier this month showed an estimated $63.7 billion in net capital outflows in the first three months of 2014, the same as for the whole of 2013.

The World Bank has said this year's total could reach $150 billion.

Russia's seizure of Ukraine's Crimea and Moscow's continued involvement in its neighbours' affairs have resulted in sanctions and threats of harsher measures from the US and Europe.

Putin acknowledged this week that sanctions have an impact on the economy. But he said Moscow was ready to take further move against Ukraine if Kiev uses military forces in the eastern part of the country.